Life Cycle Applications in the Mining Industry

Improving Environmental Performance in the
Minerals Supply Chain Using a Life-Cycle
Approach: The Role of Fuel and Lubricant
Suppliers in Enabling Sustainable
Development

Turlough F. Guerin

Abstract Suppliers have a pivotal role in enabling the mining and minerals indus-
try to achieve their goals for sustainable development and demonstrating corporate
responsibility. Reputable suppliers know their products and services and the indus-
try, and are often well placed to have unique knowledge of these in relation to their
customers’ business needs. A survey of professionals from the mining and miner-
als industry was conducted, revealing factors limiting the influence of suppliers on a
mining company’s move toward sustainable development and specifically their envi-
ronmental performance. Factors that affect a mining company’s ability to engage
with suppliers and the reasons why these companies believe suppliers are important
to the achievement of their goals for sustainable development are also identified and
discussed. This aspect of sustainable development in the mining and minerals indus-
try has not been studied extensively. Petroleum hydrocarbon suppliers, in particular,
affect a mine’s goals for sustainable development because of the extensive reach of
petroleum hydrocarbon products into the mining and minerals product life-cycle,
their impact on operational efficiencies, cost, and mine viability, and their poten-
tial for leaving negative environmental as well as safety legacies. The petroleum
hydrocarbon life-cycle is a framework that enables structured engagement between
supplier and customer on a range of sustainable development issues because it is
an example of an input into the mining industry that affects the entire mining and
minerals processing value chain. The life-cycle starts with supply of fuels, lubri-
cants, speciality chemicals, and services to the mine, through plant operation and
maintenance, transport of mined products, and ship loading, and finally to mineral
processing and other downstream value-adding. Eco-efficiency opportunities in this
life-cycle are the main focus of this chapter. There are barriers within the mining
industry to leveraging suppliers’ capabilities which have to be overcome before the
industry will realise the full benefits from such supplier engagement.

T.F. Guerin (B)
Telstra Corporation Limited, Melbourne 3000, Australia
e-mail: turlough.guerin@hotmail.com
The views presented in this chapter are those of the author and do not necessarily reflect those of
his employer, Telstra Corporation Limited.

J.P. Richards (ed.), Mining, Society, and a Sustainable World, 205
DOI 10.1007/978-3-642-01103-0_9, C Springer-Verlag Berlin Heidelberg 2009

206 T.F. Guerin

1 Introduction
As companies compete for market share, they are increasingly focussing on their
core competencies to become customer-centric. This involves, among many other
elements of a business transformation, reducing costs, which inevitably involves
looking to the supply chain to increase efficiencies and enhance the value created.
Companies in all sectors of industry are increasingly being required by their stake-
holder groups to state where their raw materials are coming from, and take action
over and above this recognition and disclosure, to influence the supply chain to
improve business as well as environmental performance.
Strategic supply chain management has been recognised in the business and
management literature for many years as a critical element of any business plan-
ning process. However, it is only in the past two decades that environmental per-
formance has been recognised to be of strategic importance in the supply chain
(Lloyd 1994; Mehta 1994; Fiksel 1995; Lamming and Hampson 1996; Anonymous
1997, 1999; Tyler 1997; Christensen 2002; Hagelaar et al. 2004; Lutz 2005).
Retailers and manufacturers, particularly in the automotive and electronics indus-
tries, have been leading progress in the greening of supply chains (Lamming
and Hampson 1996; Anonymous 1997, 1999; Eskew 1999; Christensen 2002;
Lutz 2005; Rao and Holt 2005; Barton 2006; Ellinor 2007; Ryu and Eyuboglu
2007; Simpson et al. 2007). Business’s awareness of cleaner production (or eco-
efficiency) and its uptake has helped drive this change (Altham and Guerin 2005).
However, there are fewer published studies that explicitly describe the role of
suppliers to the mining and minerals processing industry in greening its supply
chain (Robinson et al. 1995; Enever and Robertson 1998; Guerin et al. 2004;
Guerin 2006a, b).
Globally, sustainable development principles relevant to the mining industry
were adopted by the International Council for Mining and Metallurgy (ICMM)
in May 2003. ICMM member companies, which include the world’s largest min-
ing and minerals processing companies, have pledged to report on their progress
in implementing these principles and these are being adopted internationally.
In Australia, the Minerals Council of Australia (MCA) has developed a frame-
work for sustainable development for member companies, which is based on
these principles. The MCA’s framework, which is called Enduring Value, was
released in October 2004. This framework recognises the role that suppliers play
in the transition of mining companies to a sustainable future (Anonymous 2008;
Tables 1 and 2).
Two of the elements of this framework focus explicitly on how mining and miner-
als processing companies who commit to the framework (referred to as Signatories)
are to work with suppliers.
A survey of the international mining industry (Lane and Danielson 2001), though
several years old, recognised that sustainable development, in the context of mining,
included the following:

Environmental Performance in the Minerals Supply Chain 207

Table 1 International guiding principles of sustainable development in the mining and minerals
processing industry directly relevant to the supply chain

Organisation Principles and/or signatory commitments Source

The International ICMM has developed and published ten principles www.icmm.com
Council on Mining in relation to sustainable development in the
and Minerals mining and minerals processing industry. The
(ICMM) following sub-set of seven principles have
relevance to improving environmental
performance in the supply chain:
• Implement/maintain ethical business practices
and sound systems of corporate governance.
• Integrate sustainable development considerations
within the corporate decision-making process.
• Implement risk management strategies based on
valid data and sound science.
• Seek continual improvement of environmental
performance.
• Facilitate/encourage responsible product design,
use, reuse, recycling, and disposal of products.
• Contribute to the social, economic, and
institutional development of the communities in
which the industry operates.
• Implement effective and transparent
engagement, communication, and independently
veriﬁed reporting arrangements with
stakeholders.
The Global Mining The GMI has set out the following principles from www.iied.org
Initiative (GMI) the Mining Minerals and Sustainable
Development (MMSD) study:
• Minimise waste and environmental damage
along the whole of the supply chain.
• Ensure transparency through providing all
stakeholders with access to relevant and accurate
information.

• Impact on lives of people in the local communities in which mining communities
operate;
• Interaction and consultation with local communities, particularly regarding the
economic and social impacts of mining;
• Impacts on the environment where mining occurs.

The same survey demonstrated a general trend that there was a widening of an
organisation’s perceived area of responsibility in relation to sustainable develop-
ment. The survey also showed that the mining and minerals processing industry
has seen the emergence of many specialist contractors, for example in areas such
as earth moving and maintenance, and that it is normal that business-critical activ-
ities are being outsourced. It indicated that while mining and minerals processing

208

Table 2 The Australian adaptation and development of guiding principles of sustainable development in the mining and minerals processing industry directly
relevant to the supply chaina

Minerals Council of Enduring Value will apply to all exploration, mining and minerals processing activities of Signatories, wherever they
Australia (MCA) operate. It will also apply to the relevant activities of contractors engaged by the Signatories to undertake such
Enduring Value activities. In addition, signatory companies will strongly encourage application of Enduring Value to operations in
framework—Overview which they hold a non-controlling interest and to other supply chain partnerships. When referring to Enduring Value,
Signatories will be transparent in identifying those aspects of their business that are covered by their Signature. For
mining companies, this may entail identifying relevant operations. Commitment to Enduring Value brings with it a
number of obligations. In summary, these are:
• Progressive implementation of the International Council on Mining and Metals (ICMM) Principles and Elements;
• Public reporting of site level performance, on a minimum annual basis, with reporting metrics self-selected from the
Global Reporting Initiative (GRI), the GRI Mining and Metals Sector Supplement, or self-developed; and
• Assessment of the systems used to manage key operational risks (using either internal or external assessment as
appropriate).
Minerals Council of Element 2.4: “Encourage customers, business partners and suppliers of goods and services to adopt principles and
Australia (MCA) practices that are comparable to our own.”
Enduring Value • Implement a procurement policy that includes sustainable development performance outcomes in key contracts;
framework— • Promote product stewardship initiatives throughout the supply chain through partnerships with contractors, suppliers
Implementation guidance and customers;
for Element 2.4 • Encourage customers, contractors, suppliers, and business partners to adopt sustainable development policies and
practices;
• Establish “suppliers of choice” which include sustainable development criteria, such as the role of local
employment, service, and supply to foster local economies.
T.F. Guerin

Table 2 (continued)

Minerals Council of Element 5.1: “Implement a management system focused on continual improvement of all aspects of operations that
Australia (MCA) could have a significant impact on the health and safety of our own employees, those of contractors and communities
Enduring Value where we operate.”
framework— • Implement an occupational and community health management system consistent with recognised quality standards
Implementation guidance that includes:
for Element 5.1 • Control of hazards/risks of activities, products, and services over which the organisation has control, including the
activities, products, and services of contractors and suppliers;
• Identified management structures, responsibilities, resources, training, awareness, and competencies;
• A communication system that includes employees and other interested parties, and provides for the relevant and
timely reporting of performance;
• Involve employees and other relevant stakeholders in auditing management systems and in management reviews.
Minerals Council of Element 8.2: “Conduct or support research and innovation that promotes the use of products and technologies that are
Australia (MCA) safe and efficient in their use of energy, natural resources and other materials.”
Environmental Performance in the Minerals Supply Chain

Enduring Value • Where appropriate support research to improve eco-efficiency of production processes and products;
framework— • Review and innovate to reduce waste through cleaner production processes recycling and reuse of materials;
Implementation guidance • Review usage and innovate to improve efficiency in the use of energy and water;
for Element 8.2 • Take other users’ present and future requirements into account, including air and water quality and environmental
flows of water;
• Involve suppliers in identifying opportunities to reduce energy consumption or use renewable sources to reduce
production of greenhouse gases and other emissions;
• Where feasible, collaborate in industrial ecology activities to develop synergies in resource usage.
a These were obtained from the Enduring Value framework documents available at www.minerals.org.au
209

210 T.F. Guerin

companies have experience in dealing with contractors, they are not familiar with
using their influence over suppliers. Of the 32 companies surveyed, 78 and 59%
required specific environmental standards to be met by contractors and suppliers,
respectively. Respondents exhibited a strong interest in ensuring that local suppli-
ers are used in their operations, and 90% of respondents stated that engaging with
stakeholders effectively was one of the top five economic issues of concern to their
company (Lane and Danielson 2001).

1.1 A Definition of Sustainable Development
A challenge for mining companies is defining what sustainable development means
at an operational level (Azapagic 2004; Guerin et al. 2004). This includes the
extent to which the minerals value chain is included within the scope of a min-
ing and minerals processing business, and therefore to what extent suppliers are
“within scope”. There are many stakeholders for any one mining operation, and
also numerous approaches available to a mining operation for assessing the impact
of suppliers, one of their major stakeholder groups. In the context of this chapter,
sustainable development is defined in relation to the wider business impacts of min-
ing within the mining and minerals processing supply chain. Sustainable develop-
ment, should, by its implication, encompass impacts throughout the supply chain
both from a product as well as an input perspective. As referred to in the previ-
ous section, this has not been extensively studied in the literature. An explanation
for this is the emphasis on the direct impacts of the mining industry, which are
material in and of itself, even without considering the wider supply chain impacts.
As the triple bottom line performance of mining and minerals processing compa-
nies improves, it could be expected that there will be a refocus of attention on
the inputs into the industry. This chapter focuses on this input side of the supply
chain.
The working definition of sustainable development in this chapter is framed in
the concept of stewardship. It is implementing the industry’s commitment to taking
direct responsibility for its production, including inputs and processes, and a shared
responsibility with customers, suppliers, and end users to ensure that all outputs are
produced, consumed, and disposed of in an environmentally and socially responsi-
ble way.

1.2 Suppliers’ Role in Supporting Sustainable Development in the
Minerals Industry

Suppliers have traditionally been viewed as integral to the normal operation of
mining companies (Enever and Robertson 1998). With the advent of heightened
stakeholder awareness of environmental and social impacts of a mine, the role of
suppliers is coming into sharper focus as an important contributor to both a mine’s


liability and opportunity for contributing to sustainable development. There are sev-
eral specific drivers emerging both from within and external to the mining industry,
which are influencing suppliers to recognise and embrace their role in assisting the
minerals industry to work towards sustainable development (Enever and Robertson
1998; Blowfield 2000; Halme et al. 2007). These include:

• Formal recognition by the industry of a supplier’s role in assisting mining com-
panies in working towards sustainable development (e.g., ICMM Principles, and
MCA Framework for Sustainable Development; Tables 1 and 2);
• Enhanced recognition by the industry that extended producer responsibility
applies to products supplied to industry as raw materials, as well as the mineral
products purchased as a result of mining (i.e., product stewardship);
• The business need for suppliers themselves to be more competitive. This is
driving product and service differentiation in the mining industry marketplace
through social, environmental, and financial performance;
• Recognition by responsible corporations, including both suppliers and mining
companies, that their activities, products, and services interact with and affect the
broader environment and the communities in which they do business; and
• The business needs of the mining industry to identify materially important eco-
efficiency gains across their business, and their recognition that suppliers can help
drive these types of improvements.

There are two main mechanisms by which suppliers can affect a mining cus-
tomer’s operations. These are through indirect or direct supply-chain leverage,
which was highlighted in a presentation made to the forestry and timber industry
in Australia (Guerin et al. 2003), but which is equally applicable to any industry.
Indirect mechanisms include engaging with industry groups (common to supplier
and customer) to assist in moving the entire industry forward, such as by devel-
opment of industry and professional standards, frameworks, or codes of practise,
and direct mechanisms through the supplier’s unique understanding of their product
and/or service, their life-cycle, and nature of risks and opportunities in relation to
their customer’s business.
There are numerous suppliers for any mining company or mining operation.
These include product, service, and people suppliers covering every aspect of the
minerals value chain. Table 3 provides examples of generic supplier groups, suppli-
ers active in the industry, and the types of products and services they can provide.
It also provides a description of the niche leverage that each supplier grouping can
exert in support of their mining customer’s sustainable development performance.
This paper addresses these direct mechanisms.

1.3 Purpose and Scope
This chapter describes ways in which suppliers to the mining and minerals process-
ing industry can support its move towards sustainable development. It also describes

212

Table 3 Role of suppliers in influencing environmental performance of the mining value chain

Supplier’s industry Services or product provided Niche value-add to customer Example of suppliera

Electricity supplier Electricity (and commonly natural Provide carbon offset programs for customers; Origin Energy; AGL (in Australia)
gas) supply renewable energy offerings
Explosives Explosives and related services Technologies to increase blast efficiency and reduce Orica, Akzo Nobel
environmental impacts; provide expertise in
engaging with and managing neighbour
relationship
Facility managers Building and facility management Identify and incorporate environment-related key Transfield, Spotless and United
performance indicators into mining contracts; Group Services (UGS) (all
identify and drive initiatives to reduce water and operating in Australia)
energy use
Fuel supplier Fuel supply, distribution, and Provide biofuels, carbon-offset fuels, and low Shell, BP, ExxonMobil, Caltex
related services particulate/low emissions fuels; advice on fuel
efficient driving
Labour hire Temporary staff hire services Providing staff with environmental skills, awareness Skilled Group (Australia); local
training programs for staff indigenous labour hirers,
Adecco, Exalt
T.F. Guerin

Table 3 (continued)

Supplier’s industry Services or product provided Niche value-add to customer Example of suppliera

Lubricant supplier Lubricant supply, distribution, and Biodegradable lubricants alternatives; advice and Fuchs, Shell, Castrol
related services services on lubricant life extension; life cycle
management of lubricants
Mining contractors Mining operations services Identify and incorporate environment-related key Roche Bros. Mining (Australia),
performance indicators into mining contracts Kaipara (New Zealand)
Telecommunications Voice, data, internet access, Travel substitution such as high definition video Telstra, Bell Canada, Vodaphone,
dedicated networks for mining conferencing; telemetry solutions for remote Verizon
operations real-time monitoring

Waste management Total waste management services Identify and incorporate environment-related key Thiess; Veolia; Transpacific
contractors performance indicators into mining contracts; Industries (Asia Pacific region)
advice to mine on waste prevention strategies;
implement and drive waste reduction initiatives
across the mine
a Provision of a supplier’s name does not imply that they provide the niche value-added services, or that it is being endorsed by the author.
213

214 T.F. Guerin

the perceived barriers within mining companies to harnessing the opportunities
presented by their suppliers, and how these barriers may be overcome. The chapter
has been prepared to help mine personnel and procurement and operations managers
to leverage greater value from a mine’s relationship with its suppliers, particularly
those supplying petroleum hydrocarbons (fuels and lubricants). The chapter does
not address the issues of suppliers engaging the services of people from communi-
ties in which their mining customers are operating.

2 A Qualitative Survey of Sustainability and the Minerals
Industry Supply Chain

2.1 Background
Australia is a major player in the global mining industry. The expansion of the indus-
try over the past 5–10 years has led to a large investment to support this growth,
particularly in Western Australia, the nation’s richest source of minerals. The flow-
on effect from this expansion has been widespread across the Australian economy
and society, with large increases in wages (in the mining sector) and house prices
in Western Australia. In 2006/2007, mining contributed to 8% of Australia’s GDP,
employed 127,500 people directly, and 200,000 people indirectly (including sup-
pliers). It also represented 26% of Australia’s total capital investment, and con-
tributed exports totalling A$91.3 Bn. Suppliers have been major stakeholders in
and beneficiaries of this industry’s wealth, and therefore have had an important
role in influencing and shaping the Australian industry’s transition to sustainable
development.

2.2 Survey Purpose

During 2006, a qualitative survey was conducted by the author of a segment of the
Australian mining industry to identify views, opinions, and examples of the types of
suppliers providing products and services to the mining industry. The purposes of
the survey were to investigate what mining companies perceive the role of suppli-
ers to be in their supply chain, and to identify any barriers that suppliers should be
aware of that could negatively affect the role that they play. It was also conducted to
establish a baseline of the wider minerals industry to understand the potential lever-
age that exists among suppliers to help meet its own objectives for environmental
performance, and to work towards sustainable development goals. Specifically, it
was anticipated that the survey would generate qualitative data and anecdotal evi-
dence that suppliers contribute to the sustainability of the minerals supply chain and
how they make this contribution.


2.3 Survey Method
The survey asked a series of multiple-choice and open-ended response questions.
To develop the questions, the author engaged several marketing managers from
supplier organisations and procurement managers from mining companies, as well
as other corporate environmental managers. Twenty two professionals in the Aus-
tralian mining industry and their suppliers, were surveyed using an online survey
delivery program. These individuals were colleagues known to the author. Although
this was a relatively small sample, the major industry sectors represented in the
survey included diversified mining and minerals processing companies, metal pro-
ducers, exploration, and energy companies (51% of respondents). The majority of
the respondents (65%) were mining and minerals processing and consulting compa-
nies. Other respondents included researchers, academics, government organisations,
and suppliers to the mining and minerals processing companies. Suppliers and other
support organisations to the mining sector were also represented. The majority of
roles represented were consultants, contracting and procurement, and community
engagement staff.

2.4 Survey Findings

Energy, chemicals, telecommunications, and equipment were, not surprisingly, the
most important supplied products and services to the mining industry (Fig. 1).
The most important finding was that when mining companies engaged with sup-
pliers, greater than 50% of the respondents indicated that the most effective interac-
tions occurred when:

• The supplier understood the needs of the business and tailored its approach
accordingly;
• The supplier could demonstrate how its own commitment to environmental man-
agement and sustainable development would benefit the mining operation;
• The supplier created value for the mining operation by reducing costs and pro-
viding an improved solution (compared to existing solutions); and
• The supplier knew the life-cycle impacts of its own goods and/or services on the
mining operation’s business.

These findings show the high expectations that mining operations have of their
suppliers, and they provide useful guidance for suppliers aspiring to work for the
mining industry.
Secondly, the survey explored the major barriers identified to maximising the
role of suppliers in, and leveraging their contribution and influence to, enhancing
a mining company’s strategy for working towards sustainable development. These
barriers include limited engagement between a mining company’s contracting and

216 T.F. Guerin

Extremely Important & Important Somewhat or M inor Importance Not Important at All

Electricity suppliers

Equipment manufacturers

Telecommunications services providers

Tyre suppliers

Explosives suppliers

Fuel suppliers

Spare parts suppliers

Water utilities

Mining contractor

Consultants

Lubricant suppliers

Logistics and transport

Speciality chemical suppliers

General contractors incl. labour hire

Waste management service providers

Facilities management services

0 2 4 6 8 10 12
No. of responses

Fig. 1 Importance of suppliers to the normal running of business

procurement staff and environmental teams, and suppliers having limited under-
standing of their mining company customers’ operations and business needs. Others
barriers included mining companies having limited financial and human resources
for engaging with suppliers, and the hurdles presented by preferred vendor status or
similar programs in effect at mining operations (Fig. 2).
Respondents indicated that the most important action a supplier could take to
improve a mining company’s drive towards a more sustainable future was demon-
strating the supplier’s own commitment in these areas. These are described in
Table 4.
These findings reflect the largely cultural issues of maximising the value obtained
from supplier relationships and in particular resistance to change. These findings
underscore the importance of effective relationships between suppliers and mining
companies such that there is fruitful exchange of ideas, innovations and relevant
information to address problems or to identify opportunities for improvement. Pre-
ferred vendor status can work well, though less so when prices start to increase
(without corresponding value increase). Such programs can also promote the


Extremely important & important Somewhat and minor importance Not important

Limited interaction between contracting and procurement and the
environmental teams in the business

Suppliers have a limited understanding of your business

Insufficient time and resources to dedicate to managing suppliers
effectively

Preferred vendor status and programs

There is little or no incentive for suppliers to provide exceedingly
high levels of service

Suppliers are not seen by the business as strategically important

Absence of industry drivers to change the status quo

Lack of trust that suppliers can enhance performance and respond to
business' needs

No long term plan for ongoing engagement with suppliers

Limited contractor management skills in the business

Absence of strong competition (among suppliers)

Engaging with suppliers is a relatively low priority for the business

A transactional approach to procuring goods and services from
suppliers
Policies preclude assessment of supplier's potential contribution to
sustainable development
0 2 4 6 8 10 12 14
No. of responses

Fig. 2 Barriers to maximising suppliers’ influence

Table 4 What is the most important action that a supplier to your business could do to improve
your organisation’s commitment and transition to sustainable development?

Improve their own sustainability performance
Understand the business of their customers
Make sustainable development part of the selling proposition and ensure the proposition is cast at
the customer audience as they may not be experts in the field
Provide products that are energy efficient, have a limited impact on the environment, and are
socially responsible
Be proactive in promoting to customers the sustainability aspects of their products and services
as awareness is a key issue
Demonstrate their commitment to customers and an understanding and alignment with
customer’s needs and aspirations

status quo and limit innovation (such as increasing environmental performance) in
contracts.
The third major finding identified from the survey was the barriers that limited
mining companies from further engaging with their suppliers. These were a lack
of time (for this particular activity), absence of commitment from senior mine man-
agement to such engagement, uncertainty of outcomes from such engagement, and a

218 T.F. Guerin

lack of interest from suppliers to such an engagement. Other barriers include the per-
ceived increase in cost from such engagement, and that such engagement is unusual
(i.e., not standard business practise or part of management culture) for mining oper-
ations (Fig. 3).
When respondents were asked what made their interaction with suppliers effec-
tive (using examples), 86% of respondents indicated that it was extremely important
or important to them that the suppliers understood the needs of the business and tai-
lored their approach accordingly, and that the suppliers could demonstrate how their
own commitment to environmental management and sustainable development could
beneﬁt the business (Fig. 4).
For each of the following statements, approximately three quarters of respon-
dents stated it was extremely important or important that the supplier:

Extremely Important & important Somewhat & Minor Importance Not Important at All

Lack of time (for further engagement with suppliers)

Absence of senior management commitment to engagement
with suppliers

Uncertain outcomes (from further investment of time in
engagement)

Lack of interest from suppliers in undertaking further
engagement with the business

Supplier is set in its ways and is unlikely to change the way it
delivers its goods or service

Potential increased cost of supplied goods and/or services
(over the long term)

t
Not been done before by our business

No policy to engage with suppliers

Supplier may gain access to knowledge that should be kept
by the business only

Supplier not a signatory to the Minerals Council of Australia
"Enduring Value" framework for sustainable development

If we engage with one supplier we will have to engage with
their competitors too

0 2 4 6 8 10 12
No. of responses

Fig. 3 Barriers to engaging with suppliers


Extremely important & important Somewhat or minor importance

The supplier could demonstrate
how its own commitment to
environmental management and
sustainable development could
benefit the business

The supplier understood the
needs of the business and
tailored their approach
accordingly

The supplier knew the life-cycle
impacts of its goods and/or
services on the business

The supplier created value for
the business by reducing
costs and providing an
improved solution
(compared to that existing)

The supplier helped reduce
procurement costs (i.e., the
process of procurement)

The supplier provided the
goods and/or services required
and at a competitive price

The supplier provided the services
required but then went beyond
what was expected of them

The supplier was a signatory to
the Minerals Council of
Australia "EnduringValue"
framework for sustainable
development or at least
demonstrated an awareness
of this framwork's
significance to the business
0 1 2 3 4 5 6 7
No. of responses

Fig. 4 Importance of engaging with suppliers

• Provided the services required but then went beyond what was expected of them
(in terms of delivering their products and services);
• Provided the goods and/or services required and at a competitive price;
• Helped reduce procurement costs (i.e., the process of procurement);
• Created value for the business by reducing costs and providing an improved solu-
tion (compared to that existing); and
• Knew the life-cycle impacts of its goods and/or services on the business.

220 T.F. Guerin

These characteristics provide useful criteria for how to select suppliers or sup-
ply chain partners. They are aspirational attributes for any supplier to the minerals
industry.
This survey indicated fuel suppliers were perceived as important to the mining
and minerals industry, and the remainder of this paper focuses on their role, along
with that of lubricant suppliers, in providing a life-cycle examination of how a sup-
plier impacts a customer’s business.

3 Overview of the Supplied Petroleum Hydrocarbon Life-Cycle

The downstream oil industry is a major supplier to the mining and minerals industry
globally as demonstrated in the survey described in the previous section and also
in other industry reports (Guerin et al. 2004; Guerin 2006a, b). Suppliers in this
industry interface with many parts of the mining and minerals production process.
A useful way of understanding the inter-connections between a supplier and a
mining or minerals processing operation (customer) is through the supplied product
and service life-cycle across the mine operation. The life-cycle approach enables
petroleum hydrocarbons for example to be tracked from the point of supply through
to their end-of-life (Fig. 5).
Petroleum hydrocarbons are used through the entire mining and minerals pro-
duction process and can generate impacts along the minerals processing value chain.

Use & Servicing (Advice)
Storage & Internal Distribution

Supply
End-of-Life Management
(Collection/Transportation)

Reprocessing &
Terminal Recovery
Disposal

Well Head

Fig. 5 Lubricant life-cycle


Typically, the most recognised impacts of petroleum hydrocarbon usage are negative
(Table 5), often associated with pollution.
A life-cycle analysis approach enables the full benefits of closer engagement with
petroleum hydrocarbon suppliers to be identified. It also facilitates development of
subsequent joint action plans to address problems and explore opportunities. Many
of the opportunities can be positive, and the minerals industry can reap the benefits
if they are aware of and invest in the relationships with their petroleum hydrocarbon
supplier(s). Similarly, credible and professional suppliers can add depth to the level
of services or quantity and range of products they supply to a mine, including those
that bring environmental and social as well as financial benefits.
The life-cycle approach provides a useful model for mapping supplier-customer
relationships and therefore marketing opportunities across the range of businesses
in the minerals industry. Engagement between suppliers and their customers should
start at the tendering stage, continue during contract management, and remain in
ongoing interactions. Suppliers can also be a catalyst in other parts of the mining
operation, in addition to product supply and procurement, such as health, safety,
and the environment (HS & E), to initiate activities in the customer organisation to
enhance environmental performance of the mine.
The following four areas of a mining company’s business (in relation to
petroleum hydrocarbons) are affected by and need to be considered by mining oper-
ations for effective petroleum hydrocarbon management. These are also stages of
the petroleum hydrocarbon life-cycle, and illustrate where a mining operation will
need to proactively manage hydrocarbons (Fig. 5):

• Supply and procurement;
• Storage and internal distribution;
• Product use and servicing; and
• End-of-life management.

These stages are discussed in order. Selected examples of how suppliers of
petroleum hydrocarbon can interact with mining companies are provided at each
of the stages of the life-cycle.

3.1 Supply and Procurement

During procurement and supply of petroleum hydrocarbons, there is an opportunity
for the supplier to consider supply transaction options, and understand the types
of products and/or related services needed at the mine. There is also the opportu-
nity to review existing supply arrangements, that will help improve delivery, and
reduce costs, and to provide environmentally-preferred products where these are
available. This stage is critical in driving change in the mining and minerals indus-
try. In the future, there will also be increasing pressure on suppliers as well as lubri-
cant users as to the types of products used in particular applications. At this stage of

222

Table 5 Environmental impacts as a consequence of equipment maintenance and supplied petroleum hydrocarbons to the mining industry

Aspect of maintenance programa Description of impact or potential impactb

Liquid petroleum hydrocarbonsc Groundwater contamination from spillages and leaksd
Soil and surface water contamination from spillages and leaksd
Air pollution (from uncontained volatile components if present)
Disposal without reuse or energy recovery is unsustainable
Solvents Air pollution—uncontained vapours could adversely affect human health
Disposal without reuse or energy recovery is unsustainable
Groundwater contamination from spillages and leaksd
Waste grease Surface soil contamination from spillages and leaksd
Soil and groundwater contamination from petroleum hydrocarbons and metals impregnated in greased
Disposal without reuse or energy recovery is unsustainable.
Detergents Toxicity to numerous aquatic organisms; emulsiﬁcation of petroleum hydrocarbons (and reduced waste oil
recovery)
Sediment (suspended solids) Surface water contamination from spillages and leaksd ; blockages cause ﬂow-on effects in oily wastewater
management systems
T.F. Guerin

Table 5 (continued)

Aspect of maintenance programa Description of impact or potential impactb

Contaminated rags, paper, protective Excessive use and wastage is unsustainable
equipment, and gasketse
Used oil filters, burst hydraulic hoses, Often landfilled which is unsustainable. Petroleum hydrocarbons within these materials have the potential to
empty fuel, oil and grease containers impact soil and groundwater (i.e., act as contamination sources)
(e.g., drums)
Energy usage (powered equipment) High levels of use can be unsustainable if not linked into an energy generation system on site
Water usage (for washing vehicles prior High levels of use are unsustainable (may reduce quantity and quality of water supplies for other uses, e.g.,
to maintenance) availability for local communities near mine)

a Including contaminants, co-contaminants, or waste types.
b Note that these are qualified as “potential” impacts because these wastes will not always have a negative impact on the environment (i.e., if they are managed

and disposed of properly).
c These include fuels and engine, hydraulic, gearbox, differential, and steering oils, off-specification fuels and oils, cutting fluids, and oily wastewater.
d Soil and groundwater contamination can add significantly to the environmental liability of a mining operation, and site investigations, risk assessments and

remediation programs may be required to address these at closure or as part of the divestment of the operation.
e Also include oil-contaminated plastics, speciality chemicals, leather and cloth (e.g., gloves).
223

224 T.F. Guerin

the life-cycle suppliers can help mining companies achieve their sustainable devel-
opment goals through:

• Product design and development, supporting research and optimisation of
product selection, and offering product options and alternatives to conventional
products;
• Product procurement transactions and supply chain leverage.

3.1.1 Product Design and Development, and Offering Product Options
and Alternatives
Petroleum hydrocarbon suppliers invest resources into developing and producing
new products for their customers. This is reflected in the financial commitments
made by large oil companies into product research. Examples of this include
the manufacturing and supply of low emission fuel products. Low sulphur diesel
(50 ppm) is now being produced at refineries in Australia, and benzene reduction
units are currently being installed at Australian refineries to produce low benzene
petrol (1 ppm). These required maximum concentrations for sulphur and benzene
will be reduced even further as fuel regulations continue to become more stringent.
Biofuels development will be of increasing importance as the price of crude oil con-
tinues to increase and the demand for these products increase from larger users such
as mining and other heavy industries. Formulations that allow for longer storage life
and that do not cause engine power to be significantly reduced are also needed by
the mining industry.
Petroleum hydrocarbon suppliers can provide alternatives to the conventional
range of products currently being offered to the mining industry. Though cost is
critical, customers of lubricants increasingly want to exercise their ability to choose
options when purchasing products, including options related to environmental per-
formance. For example, biodegradable lubricants are preferable for applications
where there are acute risks from mining or operations in environmentally-sensitive
areas such as during exploration and at ship-loading facilities (Battersby et al. 2003).

3.1.2 Product Procurement Transactions
Petroleum hydrocarbon suppliers can use their purchasing power to secure supply
arrangements with specialised chemical manufacturers or suppliers. This includes
third party supply of specialist products which can be procured at lower cost than
can be achieved by the end user (mine), such as specialist greases, fluids, coolants,
and solvents. The benefits of this also include reduced administration to the mine,
and the fact that it places responsibility for security of supply of these specialist
products with the petroleum hydrocarbon supplier.
Suppliers can also assist a mining operation’s overall environmental program in
the development of environmental management plans (EMPs) for supplied products,
which can be negotiated at the contract stage of the procurement process. Some of


the larger mining operations in Australia are now stipulating that EMPs be prepared
by major fuel suppliers that are supplying product to their operations. EMPs should
highlight the risks and controls in place in relation to the supplied product or service
(including its transport, storage, and handling); this increases the assurances that the
mining company has identified and is controlling these risks.

3.2 Storage and Internal Distribution

The second stage of the life cycle relates to facility design and layout, which influ-
ences the placement of supplied product in relation to the operational needs of the
mine. Storage and internal distribution issues can have a significant impact on the
potential or likelihood of environmental contamination from products such as from
leaks, particularly those undetected, which can result in additional costs to the mine.
These costs can be incurred during the normal life of the mine, or will be realised at
mine closure if no action is taken during normal operations. Strategic capital invest-
ment in appropriate storage and internal distribution facilities ultimately reduces the
long-term financial liability for a mine, because it can eliminate or reduce environ-
mental contamination from product losses.
Elements of the product storage and internal distribution stage of the life-cycle,
where suppliers can help mining companies achieve their goals for sustainable
development, include the following:

• Ensuring facility design meets construction standards appropriate for the
petroleum hydrocarbon and chemical tanks and infrastructure present at the mine.
• Optimising fuel and lubricant delivery across an operation to ensure the lowest
cost and safest way of keeping the mobile (i.e., portable or transportable) plant
running.
• Identifying and assessing compliance of chemical storage areas to dangerous
goods standards (for packaged products).
• Stock reconciliation to account for product flows into and across a mine or a
series of mines.
• Testing of infrastructure (asset) integrity to prevent and minimise stored product
losses.

3.2.1 Meeting Design Standards
Fuel and lubricant storage distribution, and dispensing facilities must be designed
and built to meet minimum engineering standards. There are standards that cover
issues such as materials, tank and pipe configurations, electrical, safety, and envi-
ronmental issues. In Australia, one of the main standards is Australia Standard (AS)
1940:2004, that describes the requirements for storage of non-flammable liquids
such as diesel and lubricants. Petroleum hydrocarbon suppliers have expertise in
auditing and redesigning, rebuilding and/or repairing such facilities because they

226 T.F. Guerin

are continually working with fuel and lubricant infrastructure at their own facilities.
They also have extensive experience in applying these standards because they audit
and manage their own facilities. Suppliers are in a position to offer focused audit-
ing capabilities to their customers, and to know which fuel and lubricants standards
will be applicable to the mine. There are a range of other industry standards as well
as those for handling flammable goods, and for construction of fuel and lubricant
storage and dispensing facilities.

3.2.2 Optimising Product Delivery
As a mine expands, and the location of the mined ore body changes relative to
the mine’s fixed infrastructure, so does the mining operation’s need for the sup-
ply and dispensing of fuels and lubricants. For a mine to optimise the delivery of
fuels and lubricants in the mine, it requires extensive knowledge of transport and
distribution logistics. This will ensure that capital is not wasted on infrastructure
that could become redundant as a result of inappropriate placement of fuel or lubri-
cant delivery infrastructure. Minimising the amount of time required for refuelling
and maintenance ensures loss of productivity is kept as low as possible as well as
environmental impacts.

3.2.3 Stock Reconciliation Solutions
Fuel and lubricant stock reconciliation systems include, for example, simple
mechanical measurement (i.e., dipping) of tanks, reconciliation of flow meters on
a regular basis across a single mine, and more complex network-level (i.e., across
multiple sites) leak detection systems that have data collection, statistical analyses,
and red-flag reporting mechanisms. Reporting from stock reconciliation systems
identifies where stock control practices are inadequate, and identifies tanks, or users
of mobile and fixed mechanical plant (i.e., machinery), that have or contribute to
unusually high product losses. Such systems are particularly important for under-
ground product storage facilities. Inventory control and monitoring systems are a
relatively small investment that can reduce environmental testing and remediation
costs in the long-term, and are the only effective and preventative mechanisms for
monitoring leaking underground storage systems. Stock reconciliation systems can
also enable better control of fuel management data for more effective reporting and
reconciliation of greenhouse gas emissions.

3.2.4 Asset Integrity Testing
Asset integrity testing is the assessment of petroleum storage, distribution and dis-
pensing equipment, and other facilities for product leaks. Mining operations and
other facilities that handle fuel and lubricants are required to conduct integrity test-
ing on their assets at specified time intervals. Ten-year test intervals are common in
many jurisdictions. Asset testing can include positive and negative pressure testing
systems, which can measure the loss of pressure or vacuum in the product storage
or distribution system over time to determine the presence and extent of leaks. Asset


integrity testing should form the first stage of assessing the risks associated with the
storage and dispensing of fuel at a mine site. It is not uncommon to find that asset
integrity testing reveals that a proportion of underground storage structures (pipes
and tanks) are leaking at a facility. A recent study of a commercial fuel network
supplying the road transport industry revealed that there were approximately 10%
of sites that reported failures using vacuum testing of all underground storage and
distribution assets across the network. The presence of a failure from asset integrity
testing, when using the common vacuum testing approach, indicates that there is
air ingress and/or a crack or hole in the infrastructure. Where an asset failure has
occurred, the concrete or surface overlying the underground asset will have to be
removed to examine and identify the reason for failure. Apparent asset failures (i.e.,
reporting false positives during the vacuum test) may simply be a loose collar on a
pipe or loose pipe fittings, and not necessarily a hole in a tank or pipe.

3.3 Product Use and Servicing

Petroleum hydrocarbon products can and should be managed, during their working
life, to ensure that they do what they are supposed to do during this time. The third
stage of the life-cycle examines the impacts of the supplied petroleum hydrocar-
bon product(s) on fixed and mobile mine plant components and how these products
can be best serviced to extend their own as well as the plant’s life. Fluids selec-
tion across a mine’s fixed and mobile plant can include consolidating the range of
grades of lubricants being used. Consolidation itself can reduce the range of prod-
ucts and containers stored (and ultimately disposed of) at a mine site, which can
enhance waste management. But more importantly, fluid selection can have a dra-
matic impact on the eco-efficiency of mining equipment. Suppliers can work with
mining companies in the product use and servicing stage to achieve the mine’s goals
for sustainable development, in the following ways:

• Reviewing the mine’s maintenance strategy to enhance reliability of mobile and
fixed mine plant.
• Recommending the use of energy efficient-lubricants for high-friction applica-
tions.
• Managing lubricant cleanliness to maximise lubricant and plant life.
• Developing lubricant laundering (i.e., cleaning) as an option to extend the useful
life of lubricants.

3.3.1 Reviewing the Mine’s Maintenance Strategy to Enhance Reliability of
Mobile and Fixed Mine Plant
Further examples from this stage of the life-cycle are the contributions suppliers
can make to maintenance strategies. These should include planning for mainte-
nance activities, monitoring and analysing maintenance costs, establishing targets
for maintenance performance (in particular percentage downtime) and establishing

228 T.F. Guerin

preventative maintenance programs. Preventative maintenance is an area where con-
siderable cost savings may exist for a mine, particularly because the numbers and
sizes of fixed and mobile plants can be large. An important part of any preventative
maintenance program is to have predictive tools to define equipment defects as early
as possible. Early detection of a defect allows for better failure analysis to improve
the equipment’s service life performance. It also assists in identifying the true prob-
lem rather than a symptom of the problem. In many cases, what we see as the failed
component is a symptom of what the true cause of the failure was. To determine the
causes of failure, fuel and lubricant suppliers can provide preventative maintenance
services as a means of extending both product and plant life at customer sites using
thermographic techniques and condition monitoring programs that involve lubri-
cant analysis and diagnosis. Such programs help prevent plant breakdowns, while at
the same time delivering business and environmental benefits through lower oper-
ating and capital costs, and reducing rates of waste oil generation (Pearson 2004;
Mercer 2005; Garvey 2006; West 2006). For example, infrared thermography has
been found to be a valuable tool in the mining industry. It can survey equipment at
a mine, including electrical distribution systems, pumping systems, piping systems,
exchangers, process fired heaters, and many other types of equipment. Infrared ther-
mography can assist in finding the underlying true cause of failure. It is seen as a
predictive tool that supports other predictive technologies, such as vibration analysis
and compression analysis. One primary advantage is that it is faster than many of the
existing techniques in identifying and detecting a problem. It has the ability to find
defects before a secondary catastrophic failure occurs. A technician can view many
pieces of mechanical equipment very quickly to determine if a possible problem
exists. Various petroleum hydrocarbon suppliers are providing preventative mainte-
nance strategies, that often package the solutions together for clients (Messenger et
al. 2004a, b).

3.3.2 Recommending the Use of Energy-Efficient Lubricants for
High-Friction Applications
Energy-efficient lubricants have a niche role in enhancing plant performance. By
switching to synthetic lubricants, the most common examples of energy-efficient
lubricants, a mine can improve both efficiency of plant energy use, and environmen-
tal performance. For example, synthetic lubricants have long been recognised for
their benefits compared to conventional mineral oil-based lubricants for increasing
oil service life, reducing wear, system deposits, and improved viscosity/temperature
behaviour. They are not used widely and this is primarily because of their cost.
One benefit that has been largely overlooked is that of energy savings. Because
the mining industry must focus on reducing CO2 emissions, there is great bene-
fit to using products, that contribute to reduced energy consumption, even though
the drop in CO2 emissions may be minor compared with emissions generated by a
mine. One application is the lubrication of worm gears, which have unique require-
ments relative to lubrication of standard helical or spur gears. In particular, the high
degree of sliding contact in worm gears generates considerable friction. These types


Fig. 6 Energy efficiency 88
% Efficiency Gain
gains over conventional
84
mineral oil from application
of selected synthetic 80
lubricants in high friction
environments 76

72

68
Shell Mineral Oil Shell Synthetic PAO Shell Omala EPB 320
Oil

of gears have numerous applications across processing plants, and in particular, in
gear boxes and stationary equipment. Efficiencies with worm gearboxes are often
as low as 70% which is a result of the high loads and high friction in transferring
energy through such gear configurations. Highly polar polyalkylene glycol (PAG)-
based worm gear lubricants, such as Shell Tivela S oils, are ideal for lubrication
of steel-on-bronze worm gears, because they can lower the friction in boundary
lubrication and thereby reduce inefficiency. Maximising efficiency also means that
less power is lost in friction and converted into heat. In the David Brown Radicon
efficiency worm gear test, in which the input and output torque of the gearbox is
used to determine the efficiency, the PAG-based Shell Tivela S demonstrated 15.8%
improvement in energy efficiency relative to a mineral oil based product. Based on
new PAG-technology, the Shell Tivela S offers benefits of 9% energy savings rela-
tive to older PAG-based worm gear lubricants. Relative to a polyalphaolefin (PAO)-
based fluid, the energy saving is 11%. In terms of cost savings, for an operation
running 50 gearboxes for 168 h/week (50 weeks per annum), with an average power
output of 7.4 kW and electricity at a cost of $AUD0.14/kW/h, the savings relative
to a mineral oil (with gearbox efficiency 74.1%), in using a PAG based lubricant
amounts to $AUD82K per annum (Guerin et al. 2004). These savings will increase
as the price of electricity continues to rise at the current high rates (10% per annum,
or more).
In the same worm gear test, the benefits of energy efficiency for a biodegradable
gear oil, Shell Omala EPB, are shown (Fig. 6). For the gearbox running on Shell
Omala EPB, a 12% efficiency gain over a mineral oil-based gear oil (of the same
viscosity grade) and 7% over a PAO-based gear oil were obtained. The switch to
Shell Omala EPB in such an application would also bring the additional environ-
mental benefits of a biodegradable lubricant (Battersby et al. 2003; Guerin et al.
2004) and could be considered for any environmentally-sensitive application such
as on a wharf, jetty, or ship loader.

3.3.3 Managing Lubricant Cleanliness to Maximise Lubricant and Plant Life
Another example of product use and servicing is managing lubricant contamina-
tion. The impact on heavy vehicles from contaminated lubricants can be extremely

230 T.F. Guerin

costly due to lost productivity, increased maintenance, and spare parts costs. There
are many risks associated with lubricant contamination, especially where dirt, road
grime, and dust are abundant. As far as particulate matter is concerned, how much
is considered too much, and how will this contaminant impact on a machine’s
life? The impact of lubricant contamination will depend on the hardness, volume,
and size of the contaminating material. Harder materials such as silica, bauxite,
and iron ore will cause accelerated abrasive wear, whereas softer materials such
as talc and coal can cause build-up in oil ways and tooth roots that can lead to
failure (Carlin et al. 2003). Any size and number of particles in a lubricant can
cause problems; however, larger particles tend to fall to the base of the plant’s
fluid reservoir. The smaller particles remain suspended and are pumped into bear-
ings and other critical working components. To prevent this problem, rather than
relying entirely on oil filters, it is critical that plant and product container breathers
are kept clean (Fig. 7).
The most common lubricant and fluids (including brake, hydraulic, steering flu-
ids) contamination sources and causes include:

• The mechanical seal on metal drums working loose during abnormal transporta-
tion conditions, releasing metal particulates and causing drum varnish to flake
into the oil.
• Bulky plastic product containers having breathers that allow the product to
breathe, but that leave it exposed to atmospheric contamination.
• Bulk lubricant transport systems, which are used to administer lubricant products
to equipment in the field and can contain residue from previous loads and/or dust
particles.
• On-site practices designed to make life “easier” for on-site personnel who handle
lubricants. For example, such as leaving a grease hopper lid open so that truck
drivers can monitor grease levels also leaves the product open to the elements and
increases risk of product contamination from dust.

Several studies have dealt with this issue in greater detail (e.g., Huth 1975; Pavlat
1984; Rakic 2004).

3.3.4 Developing Lubricant Laundering as an Option to Extend the Useful
Life of Lubricants
A final example is a technology called lubricant laundering, which brings the benefit
of reduced costs in purchase of new lubricants (Messenger et al. 2004a, b). Lubricant
laundering is the refurbishing or cleaning of a lubricant so it can be reused as a
lubricant. This process can also result in fewer oil changes which means less used
oil to manage. Applications of this technology in the Oceania region are limited
at the current time because of the relatively high capital cost for the equipment,
and the labour required to handle and manage the laundering operation. Lubricant
laundering offers the potential for a mine to reduce its lubricant purchase costs;
however, it should be viewed as only one of a number of strategies to help extend


Fig. 7 Uncovered (top left), contaminated (top right), open (bottom left) breathers, and sloppy dispensing activities can lead to lubricant contamination
231

232 T.F. Guerin

the life of the supplied petroleum hydrocarbon at a mine (Neadle 1994; Messenger
et al. 2004a, b)

3.4 End-of-Life Management

The final stage of the petroleum hydrocarbon life-cycle is managing the supplied
product at the end of its useful life. Although various technologies and strategies
can extend the life of supplied product, lubricants eventually become ineffective and
need to be managed as either wastes or a feedstock for energy recovery purposes.
Suppliers can help mining companies achieve their goals for sustainability during
the end-of-life management stage of the life-cycle, including the following:

• Product packaging and stewardship;
• Used oil collection and management;
• Management of maintenance wastes;
• Fuel and lubricant infrastructure management; and
• Fuel and lubricant disaster and spill management.

3.4.1 Product Packaging and Stewardship
Providing an outlet for off-site removal of used oil and oil containers is an ongoing
challenge for both mining operations and packed product fluid suppliers. Consoli-
dation of supplied pack sizes into a single size, e.g., 18 L (where packed product is
required at a mine) and switching to bulk lubricants (where possible), are ways in
which suppliers can assist a mining operation. In Australia, an environmental and
economic review of lubricant pack size consolidation in the 10–20 L pack size range
was conducted by the author in 2003 (unpublished). The results demonstrated that
the plastics recycling industry in Australia, while technically able to reprocess the
volume of containers produced as a result of the mining industry’s consumption, is
at the stage of maturity such that the costs for reprocessing of used oil container
plastic is too high to provide a cost-effective and an equitable take-back service for
all mining and/or industry customers. In Australia, the introduction of a National
Packaging Covenant may help provide an incentive for the lubricant and specialist
chemical supply industry to provide the most environmentally-preferred and cost
effective packaging solutions for their industry to supply the mining industry. The
National Packaging Covenant puts the onus on suppliers of products with containers
and packaging to demonstrate how they will reduce the environmental burden of the
product packaging they supply, and particularly so as this covenant is now legislated
at the state-level across Australia.
There is no consistent enforcement of pollution laws in the Australian mining
industry to drive the prevention of disposal of used oil containers at mining oper-
ations. Hence, pollution continues to occur at mining operations from empty fluid
containers and from other operational wastes.


3.4.2 Used Oil Collection and Management
The used oil management industry benefits greatly from the mining industry because
of the large used oil volumes generated by mining and mineral processing. For
example, the volume of used oil collected in Australia is approximately 500 ML
annually. Of this volume, approximately 50 ML is generated by the mining industry.
Used oil handlers provide a network of collection services reaching most locations
in Australia, including remote mining areas. These suppliers often work with each
other; as sub-contractors to other used oil handlers, depending on the region. There
are however, a wide range of quality standards to which these suppliers work to,
and this has meant there are varying levels of service quality provided to the mining
industry. There are no specific legislated standards to which these suppliers have
to work, with the exception of AS 1940:2004; this standard regulates the storage
and handling of dangerous goods and has been enforced in many Australia jurisdic-
tions by state governments. The author recently reviewed and audited all major used
oil handling facilities in Australia (unpublished report). Some facilities are certified
to ISO 14001, but many of the facilities have poor housekeeping practises. Over-
all, these facilities are improving due to the increased levels of competition, largely
due to the Australian federal government’s initiative to implement legislation that
maximises the value of the used oil resource. Used oils are reprocessed back into
base oils at various reprocessing facilities across Australia, including most capital
cities.

3.4.3 Management of Maintenance Wastes
A further example is the management of maintenance wastes (Table 6).
Such waste, which includes used petroleum hydrocarbons, poses a significant
challenge to the mining industry (Guerin 2002). If maintenance activities are not
conducted effectively so as to minimise losses of petroleum hydrocarbon wastes
to the environment, they can lead to significant long-term environmental liabilities
from soil and ground water contamination. Typically, many older mining operations
(i.e., those established for >20 years) do not manage their maintenance wastes effec-
tively, based on a survey previously published by the author (Guerin 2002). Good
housekeeping in maintenance areas is critical to prevent soil and groundwater con-
tamination; such house keeping includes for example proper waste segregation and
storage of drums and wastes (Fig. 8).
Petroleum hydrocarbon suppliers often have the capability or the supply chain
influence to provide wide-ranging services that improve management of mainte-
nance activities at a mine. Petroleum hydrocarbon suppliers can assist by:

• Auditing maintenance waste streams;
• Advising on process improvements to reduce volumes and types of maintenance
wastes; and
• Advising on life-cycle management of maintenance wastes from prevention
through to treatment.

234

Table 6 Sources of wastes from maintenance operations in the minerals industry a

Stage of mining Practice or specific site location Type and source of waste
process

Exploration Drill maintenance areas Spillages and leakages of oils, grease, and degreasers during maintenance to drilling rigs
Drill mast maintenance areas Grease and oil sand blasted from mast frame before overhaul maintenance and re-painting is
carried out
Drilling operations Drilling muds with ores containing hydrocarbons
Mine Shovels, excavators, scrapers, Waste oil from oil changes to mine equipment, spillages from breakdown maintenance, blown
backhoes, wheel loaders, and hydraulic hoses, spillages from refuelling, maintaining oil and grease levels on field
bucket loaders equipment; empty drums and used protective clothing
Maintenance Wash down areas Wash down of mobile equipment, effluent containing oils, diesel, grease, detergents and soil
Heavy vehicle equipment Oil and filter changes on mobile equipment, waste grease containers, blown hydraulic hoses,
servicing used protective clothing and lead acid batteries; waste tyres; worn brake pads; solvent for
engine parts cleaner; plastic drums; waste coolant, brake and transmission fluid
Light vehicle servicing Oil and filter changes on mobile equipment, waste grease containers and lead acid batteries; tyre
bay wastes; general waste around car ramps; worn brake pads; solvent brake cleaner; solvent
for engine parts cleaner; plastic drums; waste coolant, brake fluid and transmission fluid
Servicing pits Spillage during vehicle servicing, regular greasing and cleaning out of sludge pits; used
protective clothing
Workshop floors Spillage onto workshop floor during maintenance and repairs, and leakage and spillage from oil
storage area and from wash down practices
Oily wastewater separators Incorrectly designed or poorly maintained equipment
Oil filter draining Spillages around collection vessel
T.F. Guerin

Table 6 (continued)

Stage of mining Practice or specific site location Type and source of waste
process

Waste oil storage Spillages during storage and transfers
Workshop drain cleaning Sludge (from build-up)
Compressor sheds Oil changes, leakages, compressor clean down, water/oil drainage from filters and air receiver,
wash down of concrete floor
Drum storage areas Leaks/spills from drums, wash down of concrete floors and drum cleaning
Fuel supply depots and Leaks of diesel and gasoline (on- or off-site), sometimes from underground supply pipework;
infrastructure refuelling leaks, (overflows and broken seals); surface water run-off
Oil supply bays Spills during filling of storage tanks, filling of vehicles and mobile tankers
Equipment refuelling Spillage (overfilling) during refuelling of equipment and servicing trucks, leaking pumps and
blown hoses

Upstream (or Processing plants Oil changes on scrubbers, screens and conveyor belts; grease
primary)
processing
Crusher areas Dust suppression foam; grease and oils
Ore ship- Stackers, reclaimers, conveyors, Grease and leaked oil, particularly hydraulic fluid
ment/transport train load out areas
Downstream Milling, smelting, refining, Metals and minerals; petroleum hydrocarbons spills, soil and groundwater contamination in
processing preparation for sale particular from lubricants, cutting fluids, and hydraulic fluids
a This is a comprehensive listing of potential sources and types of wastes observed at mining operations during site visits by the author.
235

236

Fig. 8 Petroleum hydrocarbon wastes including used ﬁlters (top left) should be segregated from other types of wastes. Unbunded storage or ineffectual bunding
(top right) should be rectiﬁed to meet appropriate industry standards. Spill absorbent is applied to a workshop oil loss (bottom left) and improper storage of
T.F. Guerin

used oil containers at a lube bay (bottom right)


These areas have been dealt with extensively elsewhere and are not discussed
further in this chapter (Guerin et al. 1994; Guerin 2002).

3.4.4 Fuel and Lubricant Infrastructure Management
A further example of end-of-life management of petroleum hydrocarbons is man-
aging aging fuel and lubricant infrastructure and assets. This stage of the life-cycle
poses the single biggest financial risk to mining companies from petroleum hydro-
carbons. Therefore, the procurement of cost effective and technically proficient envi-
ronmental consultants and civil contractors to adequately delineate and remediate
contaminated soil and groundwater, is critical. Furthermore, to minimise the amount
of remediation needed, asset integrity testing should also be carried out. Petroleum
hydrocarbon suppliers in Australia and the wider Asia Pacific (Oceania) region
have developed testing specifications that consultants and contractors are required
to use for soil and groundwater assessment and remediation. Such an approach
specifies the expected outcome or objective of each phase of the assessment is for
the mining operation, enables standardised consultant and contractor performance,
produces consistent results across operations and countries, and minimises wasted
efforts in ineffective environmental assessments. Petroleum hydrocarbon suppliers,
specifically their environmental and remediation teams, therefore have expertise
that may help mining companies ensure that any work done by external parties
to delineate contamination for improved environmental management and closure
planning is effective, and properly estimated and executed. These resources can be
drawn upon by the mine procurement staff as part of the fuel and lubricant supply
agreements.

3.4.5 Fuel and Lubricant Spill Management
Fuel and lubricant suppliers usually have specialised expertise and dedicated
resources for the management of petroleum hydrocarbon spills. Mining operations
can harness this expertise by having their suppliers review on-site spill or disaster
management plans, purchasing spill kits or related products, and engaging them for
co-ordinated disaster management training. These services can be included in sup-
ply agreements or procured out of scope of the supply agreement. Suppliers can
also assist audits, develop schedules for testing disaster management programs, and
identify resources that are needed to ensure effective planning.

3.5 An Example of Engagement Between a Fuel and Lubricant
Supplier and an Australian Mining Company
3.5.1 Background and Rationale
Incorporating environmental considerations into the minerals supply chain, such as
those opportunities described in the preceding sections, requires a willingness for

238 T.F. Guerin

deliberate engagement between the supplier and the mine through focused planning
sessions. These planning sessions need to be a collaborative effort by both parties;
otherwise, if driven by the supplier only, they could be perceived as simply a move
by the supplier to elicit the provision of more product purchases or services into the
mine. This section reports an example of how the life-cycle approach was success-
fully used by a coal mining company to engage with their fuel and lubricant supplier
and improve the environmental performance of its operations.
The mine produces approximately 10 Mt of coal annually and is located in the
central coastal region of eastern Australia. It has approximately 10 satellite mines
within approximately 200 km from the mine’s head offices, and is of strategic
importance to the electricity generation industry on the east coast of Australia. The
mine’s diesel fuel consumption is approximately 50 ML per year. Lubricant usage is
estimated at approximately 2 ML per year.

3.5.2 Engagement Process
Both the supplier and mining operations agreed that there could be value in run-
ning an engagement session to systematically identify ways to improve the value
each party would obtain from the relationship. The existing contract did not
preclude such an engagement process. A half day engagement session was co-
ordinated by the supplier on the mine’s site. Participants in the engagement session
were the:

• Procurement Manager from mine
• Two Operations Personnel from mine
• Environmental Officer from mine
• Key Account Manager from supplier
• Environmental Adviser from supplier
• Alternative Fuels Manager from supplier
• National Mining Marketing Co-ordinator from supplier

Approximately half an hour was dedicated to brainstorming each of the 4 stages
of the supplied lubricant and fuel product life-cycle (Fig. 5). The remaining 2 h were
used to review and clarify each of the ideas raised and prioritise these as actions.
Actions were ranked according to whether they were high, medium or low prior-
ity (as agreed by both parties), and accountabilities for the high priority actions
were set.

3.5.3 Engagement Outcomes
Table 7 lists the outcomes from the engagement session.
For each of the stages of the life-cycle, the most important issues were captured
and key actions to address these issues were identified. For the supply stages of the
life-cycle, alternative fuels and guaranteed supply of existing fuels were of most
concern. For storage and distribution, checking compliance to relevant standards

Table 7 Outcomes from an engagement session between a petroleum hydrocarbon supplier and a mining customer in Australia

Stage of hydrocarbon Issue Description of ideas and issues raised in engagement Priority Solution option/actions: (C) = Customer
life-cycle session (L/M/H) and (S) = Supplier to action
Alternative There is a need to identify bio-diesel sources H • Conduct trials on biofuels (C).
1. Supply and
fuel available to the mine and whether it is feasible for • Regulatory changes to be monitored (C).
procurement
the mine. The following issues were raised: • Any new alternative fuels to have
• Impact on power, odour, impact on emissions testing prior to supply to assess the
(levels and quality), compliance to evolving impact on emissions (S) as well as
laws/regulations. performance impact assessed (S).
• Impact on emissions is critical issue.
• Particulates were identified as critical issues.
• Whether or not alternative fuels would lower
engine life.
Guarantee of Security of supply/availability of product: The H Priority of this issue noted
supply following issues were raised:
• Consolidating the purchasing of other
chemicals with petroleum hydrocarbons.

• Identified the importance of understanding
what back-up plans are there to ensure
security of fuel and lubricant supply to the
customer in future.
Delivery The following issues were raised: M Noted. C and S agreed that these would
• Identify if road transport is the best/only way require attention in the contract
of supplying product to the sites
• Ascertain the supply footprint (i.e., total
environmental cost of supplying of product).
• Acknowledged that damaged drums were
leading to environmental risks across the sites.
• Identified need to ascertain if fuel unloading is
AS 1940:2004 compliant.
239

Table 7 (continued)
240

Procurement Mine acknowledged the need to influence suppliers M Investigate introduction of Quadrem—an
process (using new safety, environmental regulations and electronic trading medium (C & S)
controls). The following issues were raised:
• Minimise paper (required to have fuels and
lubes delivered).
• Complexity of procurement process
(electronic data interface—Quadrem).
2. Storage and internal Compliance The mine identified the need to ascertain if: H • Supplier has an advisory role (S).
distribution • there was scope within the • External audits required every
fuel supply contract for conducting integrity 3 years according to the mine’s own
testing of tanker and checking compliance AS auditing requirements(C).
1940:2004. • Internal environmental compliance,
• the supplier was auditing the fuel facilities including latest version of
at the mine (was not known by the mine if this AS 1940:2004 (C).
was the case).
Product Safety and Environmental risk of moving product: A H • 20 L oil containers to be transported
handling solution could be in piping product in self-bunded pallets (C & S).
• Minimal handling of products should be a • Move to bulk (to develop pay back
goal at the mine. scenario, need to undertake a benefit
• HSE compliance with regards to moving cost analysis(C & S).
product (e.g., hazardous). • Investigate training options for
• There is a need to provide training for key machine operators (C & S).
personnel at mine sites on dangerous goods
management.
• Piping long wall fluid to the underground
mine (i.e., getting product to mine face) could
reduce manual handling of 20 L containers.
T.F. Guerin

Table 7 (continued)

Storage Mine requested information on best methods for M Noted. Supplier to provide best practise
facilities storage including bulk tanks, efﬁciency of product information (S)
use on site, underground storage for bulk
lubricants, portable underground diesel tanks, and
increased availability of ﬂeet
3. Use and servicing Environmental Contamination of the environment from petroleum M-H Noted
contami- hydrocarbons
nation • Minimising spills and wastage.
• Spillages from use and handling on site.

• Due diligence and contaminated
groundwater/soil.
• Liability arising from contamination.
• Emulsion: Where does it go? Could go to
groundwater and soil.
• How much soil and groundwater
contamination is at the customer sites?
241

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